Frack wars: What the energy industry can learn from Denver Water

All the major players among the region's natural gas companies are gathering in Denver this week, celebrating the resurgence of their industry thanks to the advent of hydraulic fracturing technology -- and pondering why public opposition to fracking in Colorado and elsewhere is so fierce. It's a tectonic mystery no geologist can solve: If the "Shale Revolution" is every bit as wonderful as its proponents claim, why haven't they been able to win the hearts and minds of local communities in the shadow of the drill rigs?

A certain tone of self-congratulation is to be expected at the 25th Annual Rocky Mountain Energy Summit, put on by the Colorado Oil and Gas Association at the Colorado Convention Center. Fracking, which involves pumping massive amounts of water mixed with chemicals deep into the ground to extract gas and oil found in tight shale formations, has opened up new frontiers of production, undreamed of even five years ago. It's led to bold predictions about tapping into cheap energy for developing nations, bridging the gap to renewables, fighting climate change with relatively "clean" natural gas, and so on. Fred Julander, the founder of the summit, even eulogized fracking pioneer George Mitchell as "a patriarch of the revolution...perhaps the most significant man of the 21st century."

So why are homeowners in places like Loveland (not to mention congressman Jared Polis) fighting so hard against the Revolution? Maybe it's because the industry hasn't done enough to address intensely local concerns about property values, environmental degradation, water supplies and sustainability. That conclusion was one of the takeaways from an offbeat panel yesterday that delved into what the energy industry can learn from the water wars already fought by one of the state's biggest players: Denver Water.

Patricia Limerick.

Moderated by historian and University of Colorado professor Patricia Limerick, the panel afforded a glimpse into how Denver Water rebounded from the fiasco of the nixed Twin Forks project and managed to win over its bitter enemies on the Western Slope, achieving a pact to enlarge existing reservoirs and delivery systems. Denver Water CEO Jim Lochhead described how the negotiations stretched over six years, involved more than forty government agencies and stakeholder groups, and resulted in an agreement that went well beyond federal permitting requirements.

"We had to rethink our role as a water provider," Lochhead explained. The agency's expanded mission now involves supporting "the economic health of local communities and the environmental protection of our watersheds."

Jim Lochhead.

The comparable playbook for oil and gas interests isn't much different from what COGA head Tisha Schuller advocated in my recent profile of her, "The Insider:" get engaged in local decisionmaking, invest in community relations and education campaigns, go beyond what the regulators require to allay local concerns about potential economic and environmental impacts.

But it wasn't Schuller making those points on stage yesterday. It was Mike King, the director of the Colorado Department of Natural Resources -- a supposedly neutral regulator of the oil and gas biz rather than a cheerleader.

"We're not doing a good job of explaining what the benefits are [of oil and gas development]," King told the faithful. "We dismiss our critics at our own peril.... If you want to be accepted, you have to go above what the law requires.... Nothing we do is going to remove all opposition to industrial activity in an urban or exurban area, but that's not our goal. Our goal is to get to critical mass.... I look forward to standing shoulder to shoulder with you, as a regulator of this industry, to figure out how to do this."

"Our" goal? "Shoulder to shoulder"? King retreated slightly on his use of the clubby "we" when an audience member asked how to deal with the attack on the industry launched by self-proclaimed "fracking poster boy" Polis. "We're not in a position to be advocates, that's not what our role should be," King said, now speaking as regulator rather than silent partner. "But we do have an obligation to make sure the public understands what the facts are."

Indeed. One fact that may be standing in the way of the industry building bridges is the opposition's longstanding objections to the lax way state regulators have dealt with violations and enforcement issues -- and the huge amounts of cash pumped into lobbying state government on behalf of the industry. If fracktivists see the conflict as us v. them, maybe it has something to do with how government officials like King are so quick to use the "we" word.